Looking for ways to close our first deal

[Mike Lowery]

My partner @Jonathan West and I have found an off-market four family that we are interested in purchasing from a seasoned investor. This property is in a great location and the numbers work out based on our conservative analysis. We want to build a relationship with the seller as he and his mother will be looking to get out of the game in the future and it would provide us the opportunity to purchase his investment properties prior to them hitting the market. 

The purchase price has been agreed upon at $185K. The most recent comparable is located a few blocks away and sold in November of 2016 for $209K. While we could get conventional financing, we are trying to think of creative ways to finance this deal. The seller's wife is not happy doing land contract, but my be willing to carry a second for part of the down payment. 

It appears as if the seller is dealing with a lender that also has an early payment penalty clause for about another year, so we were looking into helping him out with that and possibly taking over ownership, but not recording it and paying off the loan until the penalty lapses. 

Any thoughts on how to structure this without doing a conventional loan?

[Casandra M.]

It sounds like the Seller's wife needs to be educated on the benefits of having several options available to them.... would the sellers be able to refinance their current loan into something more favorable, and then sell the property to you? The refinance costs may be less than the pre-payment penalty.

EDIT: This would also require an appraisal on the seller's part, which would benefit you as the buyer, in case the property comes in under expected market value.